GAO found that: (1) policymakers need data showing the types of continuing coverage, if any, that participants receive after spinoff terminations to decide if changes should be made to mitigate the potential adverse effects of terminations; (2) PBGC does not provide the necessary data; and (3) some plan terminations that PBGC reported in 1985 as spinoffs included working participants who received no continuing pension coverage or different coverage that could give them higher or lower benefits than before. GAO believes that, by using the data it routinely collects when plans are terminated, PBGC can improve its reported spinoff termination data by specifying the types of continuing pension coverage, if any, provided to working participants.

Recommendation for Executive Action

Status: Closed - Implemented

Comments: PBGC has taken action to improve its procedures for reporting on how spinoff terminations of plans with excess assets affect working participants' pension coverage.

Recommendation: PBGC should improve the information it reports on spinoff terminations by showing how the pension coverage of working participants is affected after the spinoff.